Nike has sold its virtual goods subsidiary RTFKT last December, thus proceeding with its intention to freeze the NFT and blockchain operations by the end of January. The sportswear giant made it clear last year that it would no longer be occupying the ground of non-fungible tokens (NFTs) and other blockchain-based projects. The sale coincides with the timeframe of just slightly over a year when Nike was winding down its RTFKT unit – the very unit that it had acquired in order to solidify its presence in digital fashion and virtual collectibles.
Nike’s RTFKT subsidiary, which has been operating under the company’s umbrella, spoke of its success and how it was proud, in a message shared on X in 2024. The crew has stated that they have done a marvelous job in creating a strong community that has connected physical and digital art in such a way that, through this community, artists and collectors have had new thoughts about the possible different shapes of digital ownership.
Nike moves further away from NFTs and digital assets, back to the core sports business
In a post on Medium, Nike announced in September that it would halt NFT products created by RTFKT. The company had previously mentioned that its collaboration with video game partners to make wearables in-game using RTFKT designs would still continue, even though the production of blockchain-based collectibles had been stopped.
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This step is consistent with a more significant strategy shift that has been taking place, under the leadership of CEO Elliott Hill, who is now in his second year at the helm of the company. It seems that the company is moving away from digital assets and turning towards traditional sportswear, footwear, and the rebuilding of wholesale relationships with retailers like Dick’s Sporting Goods and Foot Locker, who have been its partners.
Nike’s Purchase of RTFKT occurred in 2021 during the tenure of previous CEO John Donahoe, who advocated for a direct-to-consumer and digital-first approach with a standard technology application across channels strategy. The deal at that moment was to make Nike’s position as a player in digital collectibles and the metaverse stronger which was during the peak period of the NFT and virtual world boom from 2020 to 2021.
RTFKT co-founder dies, Nike loses NFT lawsuit
Benoît Pagotto, RTFKT’s co-founder, died last year at the age of 41 years. Philippe Rodriguez was the first to make the announcement on LinkedIn. Rodriguez, whose company Avolta Partners was involved during RTFKT’s acquisition by Nike in 2021, described Pagotto as “extremely imaginative, very secretive and rather modest.”
Later, another co-founder of RTFKT, Steven Vasilev, confirmed the death of Pagotto with a post on X, saying that the legacy and the inspiration that Podgnot had given to others would still be there.
At the same time, Nike was encountering a lawsuit over its exit from the NFT business, by coincidence. Last April, a group of consumers consisting of buyers of NFTs and associated crypto assets under the Nike brand initiated a class action in federal court in Brooklyn claiming that the company’s sudden shutdown of RTFKT had a negative impact on the value of their investments.
Jagdeep Cheema, an Australian resident, is leading the lawsuit and is arguing that the company’s move caused NFT prices to plummet significantly resulting in financial losses. He along with his legal team is demanding more than $5 million in compensation which they allege is owing to infringement of consumer protection rights in multiple states including New York, California, Florida, and Oregon.
